WASHINGTON — For years, there were red flags — so many they could have massed into a crimson blanket.

As with the Bernard Madoff case, the scandal surrounding billionaire R. Allen Stanford now seems clear and obvious in hindsight. Yet Stanford managed to run his alleged scheme even while the Securities and Exchange Commission and other regulators had him on their radar screens and investigated his businesses. Stanford wasn’t charged until last week.

From his tiny accounting firm’s office near a North London fish-and-chips shop to certificates of deposit promising outsized returns sold by a bank in Antigua, ample warning signs over the years suggested Stanford’s business wasn’t what it seemed.

Among them:

A finding by regulators in June 2007 that Stanford’s company lacked enough capital to function properly as a securities brokerage firm. The company paid $20,000 to settle charges by the National Association of Securities Dealers without admitting or denying them.

Stanford’s businesses were inspected and investigated several times, starting in 2006 by the SEC and in 2004 by the NASD, the brokerage industry’s self-policing group, now called the Financial Industry Regulatory Authority, or FINRA. NASD’s scrutiny resulted in several disciplinary actions: the regulator fined his brokerage company four times, with penalties totaling $70,000, for violations that included misleading investors in sales materials about the risks of the CDs.

A 2006 lawsuit by a former employee alleging that Stanford’s company ran a Ponzi scheme. Two other ex-employees asserted in a suit in January 2008 that Stanford’s Antigua bank, Stanford International Bank Ltd., sold CDs based on inflated returns and had destroyed documents.

A board of directors that included Stanford’s father, his college roommate and a family friend who remained on the board years after suffering a debilitating stroke.

The Antigua-based accounting firm that audited the offshore bank was tiny and little known.

A 1999 Treasury Department advisory that warned U.S. banks to scrutinize transactions involving Antigua. It said a new regulator in Antigua was essentially a captive of offshore banks it was meant to supervise. (The advisory was lifted in 2001.)

Last week, the SEC accused Stanford in a civil lawsuit of a “massive” fraud. It said he peddled sham promises and funneled investors’ money into real estate and other assets not easily turned into cash. FBI agents in Houston are running a parallel investigation.

Stanford, who was served legal papers by FBI agents last week, hasn’t been charged with any crime.

The SEC began investigating Stanford’s businesses in October 2006 but was asked by another, unidentified federal agency to suspend its inquiry, an SEC official in Texas told news organizations last week.

“This was an active investigation throughout and it was going on for some time,” John Nester, an SEC spokesman in Washington, said Sunday. He wouldn’t confirm that the investigation began in October 2006 or identify the other agency. But he said there were complexities in the probe, such as issues of foreign jurisdiction and the SEC’s cooperation with other federal agencies, including some with criminal authority.

The SEC is looking into Stanford’s regulatory history to be able to respond to media inquiries about the background of the case but not as a review of the agency’s handling of it, Nester said.

Coming after the Madoff scandal, the case of another politically connected financier accused of a global fraud has deepened doubts about the SEC’s oversight of such cases.

And it’s led some to wonder whether the SEC chose to fast-track its case against Stanford only after the uproar over its failure to detect the alleged Madoff fraud. SEC investigators began interviewing Stanford employees in January, just weeks after Madoff’s arrest.

“This is another black day for the SEC, unfortunately,” said James Cox, a Duke University law professor and securities law expert. “It’s deja vu all over again.”

The lawsuit filed in 2006 by ex-Stanford employee Lawrence DeMaria was settled out of court. The suit brought in January 2008 by two financial advisers at Stanford International Bank has entered arbitration proceedings before FINRA. The bank claims that the advisers owe money it advanced to them.

Parallels between the Stanford and Madoff cases are striking.

The swashbuckling Stanford, 58, with a personal fortune pegged at $2.2 billion by Forbes magazine, allegedly attracted $8 billion in investors’ money. He donated to campaigns of U.S. lawmakers and bankrolled public works and sports teams. He was knighted in Antigua.

Stanford’s enterprises in Antigua include a newspaper, restaurants, a development company and the ornately landscaped Stanford cricket grounds. Stanford owns private jets and homes in Antigua, Texas, Florida and the U.S. Virgin Islands, and runs businesses from Houston to Miami to Antigua to Switzerland.

He lured investors from Latin America who worried about stability in their home countries or currencies.

As for Madoff, he was long a high-powered figure on Wall Street, a former chairman of the Nasdaq Stock Market who served on SEC advisory committees.

He owns homes in New York and Palm Beach, Fla. In attracting an alleged $50 billion, Madoff solicited investments from charities, banks and European aristocrats.

A whistleblower, Harry Markopolos, had raised red flags to the SEC about Madoff starting 10 years ago. But the stature of a Madoff “casts a glow around the person that might cause you to put your guard down a bit as a regulator,” said Mercer Bullard, head of a mutual fund watchdog group and a former SEC attorney.

As with Stanford’s offshore bank, Madoff’s auditor was a no-name firm, run out of a drab building in a New York City suburb.

“That’s one of the tests,” Bullard said. “You look at the accountants.”

Both Stanford’s and Madoff’s businesses had undergone investigations and inspections by the SEC and the predecessor of FINRA.

FINRA spokeswoman Nancy Condon said the two agencies’ Stanford investigations ran parallel to each other, “and at some point, both of us became aware of each other.” FINRA has said it lacked jurisdiction over Stanford’s investment business run by the offshore bank because it wasn’t a securities brokerage operating in the U.S.

The regulator’s oversight covered advertising material for Stanford’s CDs but not for the financial products themselves sold by the bank, FINRA says.

FINRA said Sunday, in a statement in response to questions: “It became apparent early in our review that, as it was in 2007, our jurisdictional inability to reach certain aspects of the Stanford businesses and personnel likely would interfere with, if not stymie, our investigation. That, plus the breadth of the SEC’s recent action, has led us to stay our investigation for the time being.”

Though they aren’t named in the SEC’s complaint, regulators said Allen Stanford was helped in running the Antigua-based operation by his 81-year-old father, James, and by another resident of Mexia, Texas, described on the company Web site as an “active investor and cattle rancher.”

But that man, O.Y. Goswick, 85, suffered a stroke in 2000 and hasn’t been able to speak, according to his son, Richard. Richard Goswick said the two older men became board members in the company’s infancy and were kept on through the years.

A bank’s board is supposed to oversee management. But only two board members — Allen Stanford and James Davis, his college roommate — knew how the money was invested, the SEC alleges.

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